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BRC: 'Lack of wage growth is a concern for both retail and the UK economy'

Laura  Barnes
BRC: 'Lack of wage growth is a concern for both retail and the UK economy'

The latest ONS Labour Market data has been published today (November 15th) revealing that pay growth showed little sign of keeping up with the current rate of inflation.

The British Retail Consortium (BRC) has rated to the news, warning that the lack of wage growth is a concern for the UK’s retail sector.

"While there are signs that the rate of job creation is now slowing, with total numbers employed falling in Q3 from Q2, the unemployment rate held at a record low of 4.3 per cent,” said Rachel Lund, head of retail insights and analytics at BRC.

“However, more important to consumer spending is pay growth, which still shows little sign of keeping up with inflation. The 2.2 per cent earnings growth in the three months to September still leaves UK households wages falling in real terms. That means budgets in the run up to the festive period will be stretched and retailers will have little choice but to compete harder in what is already one of the most competitive markets in the world.
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“The lack of wage growth is a concern for both retail and the UK economy,” warned Lund. “The Bank of England and other forecasters, have consistently expected an imminent pick up in wage growth and been disappointed.”

The BRC reported that this time last year, the Bank expected growth to reach 2.75 per cent by the end of the year. Two years ago, they expected it to be four per cent, and they now expect just 2.25 per cent.

“Even the relatively sober picture for the outlook for the UK economy is predicated on a pick up in wage growth next year,” said Lund.

“While reports by the Bank’s agents suggest higher pay growth might be in the pipeline, however if activity doesn’t pick up businesses may not be in a position to put those pay increases in place. So we urge the Chancellor to do all he can next week to support UK consumers with a budget for shoppers.”

Last month, the BRC sent a submission to the Chancellor, calling for the upcoming Budget to support the retail industry’s future and help shoppers by keeping the cost of living down.

“Retailers want to help build the confidence of their customers, us all as shoppers, not damage it. But to do this they need the support of Government policy that keeps down the cost of living, not exacerbates it,” warned BRC.

You can read BRC’s Helping Shoppers Budget submission in full here.

Tags: Retail , british retail consortium , brc , ONS , wage growth

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